Term paper

1. E-COMMERCE IN INDIA
Nivin Vinoi
P14199
PGDM-B
Abstract
E-commerce is the procedure of conducting
business online. There are a number of applications of e-
commerce, including online retailing and electronic markets,
electronic storefronts and on-line auctions. Granting to the
current trend E-commerce has a good scope in widening of its
market and reducing the operating costs. Simply E-commerce is
not a passive tool that magically brings in business and win. It
requires a great deal of hard marketing efforts. Careful
consideration is needed regarding how to best confront the
concern on its web site. Today India is growing as a dependable
market for E-commerce traders. From giants like E-bay,
Amazon to local players like jabong, olx etc. are doing good
business in India.
Key words:
ONLINE TRAVEL BOOKING SITES:
Yatra.com, Travelocity.com,
MakeMyTrip.com, KAYAK.com,
Cleartrip.com, RedBus.com etc.
ONLINE SHOPPING SITES: Flipkart.com,
Myntra.com, Jabong.com, eBay.in,
HomeShop18.com, Tradus.in, Shopping.India
Times.com, SnapDeal.com, Infibeam.com,
Zovi.com
INTRODUCTION
The primary goal of information technology and
systems is the ability to transfer large quantities
of data and information between organizations
and individuals quickly and accurately. In many
cases, information technology significantly
reduces time, effort, and expenses. Applying the
concept of IT and with the help of World Wide
Web (WWW), E-commerce industry was
originated for pulling in life more comfortable.
E-commerce is actually one of the functions of
E-business. In addition to shopping functions, e-
business is the operation of purchasing and
selling goods or services electronically rather
than through formal means, along with the
support activities and transactions necessary to
perform these jobs.
India has an internet user base of about 250.2
million as of June 2014. The penetration of e-
commerce is low compared to markets like the
United States and the United Kingdom but is
growing at a much faster rate with a large
number of new entrants. The industry consensus
is that growth is at an inflection point. The
development of e-commerce industry has made
lives easier for countless people. It’s not just
gifts but even everyday items like grocery and
notebooks and pens that can be bought online.
Books, apparel, shoes, jewelry and accessories,
travel tickets and hotel bookings are some of the
commonly purchased items online.
Background of the study
The rise of internet companies in India started
in the mid-1990s. The first Indian internet
companies, mainly featured online classifieds,
matrimonial and job portals. The low
penetration of net, lack of awareness and lack
of development and confidence in online
payment systems were reasons for internet
companies not actively engaging in e-
commercialism. It was only in the mid-2000s,
the e-commerce industry in India started to
take off. The first e-commerce services
available were primarily offered in the travel
industry. Even today travel booking websites
hold a majority portion of the Indian
commerce space. Some instances of travel
sites are Yatra.com, Travelocity.com,
MakeMyTrip.com, KAYAK.com,
Cleartrip.com, RedBus.com etc.
A couple of years later, the online retail
industry started taking shape and it is rapidly
growing today. E-commerce space relating to
the deals and discount websites started
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2. becoming popular towards 2009 and onwards
while the concept of social media for e-
commerce is still trying to make a foothold in
the markets despite having one of the largest
populations using Facebook. The Indian e-
commerce markets offers services in B2B,
B2C and C2C segments with most of the
players operating in the B2C segment. The
main factors for the rapid growth in the
revenues and number of e-commerce
companies operating out of India was the
growth of a young tech-savvy generation
employed in IT companies, rise in disposable
income, changing lifestyles and easier access
to banking and internet facilities.
II. THE STUDY
India’s e-commerce market was worth
approximately $2.5 billion in 2009, it went up to
$6.3 billion in 2011 and to $14 billion in 2012.
Approximately 75% of this is travel related
(airline tickets, hotel bookings, railway tickets,
online mobile recharge etc.). Online Retailing
comprises about 12.5% ($300 Million as of
2009). Agreeing to a survey by Forrester
(Exibit1), the Indian E-commerce sector is set to
grow the quickest in the Asia-Pacific region at a
CAGR of 57% between 2012-2016. Though
currently having one of the smallest bases, e-
commerce market in India is set to grow by more
than fivefold by 2016 as the number of online
spending is expected to increase rapidly.
The top 10 e-commerce websites in India on the
basis of market shares are 1. Flipkart.com, 2.
Myntra.com, 3. Jabong.com, 4. eBay.in, 5.
HomeShop 18.com, 6. Tradus.in, 7.
Shopping.India Times.com, 8. SnapDeal.com, 9.
Infibeam.com, 10. Zovi.com. According to the
number of visitors visited (Exibit 2) Mytra
stands top. After that comes flipkart, then
jabong, amazon, snapdeal, Home Shop 18.
Myntra, Jabong and zovi are exclusively for
fashion and lifestyle products only whereas e-
bay, flipkart, amazon, ebay, homeshop 18,
tradus, shopping India times, snapdeal, Infibeam
etc deals with all categories of items including
electronic gadgets. There are lot of factors that
attract customers to this online sites. Some of
them are the cash back guarantee, ability to give
cash on delivery, fast delivery, different variety
of branded products at one platform, discount
coupons etc. The entry of Amazon into Indian
markets with its e-commerce website amazon.in
has led to a new chapter in the e-commerce
industry in India. With direct FDI still not
permitted, Amazon has come up with an
advanced business strategy to get in this sunrise
sector in India. It has brought together different
online vendors on a single platform. This could
be a strategy that even bigger Indian players
could use in the long run as the markets mature.
The entry of Amazon to Indian market is a threat
to flipkart. So for widening their platform
flipkart bought myntra and also raised their
investments. When new companies arrive the
competition tightens, so companies will be
forced to reduce prices and give lot of offers.
Due to this the ultimate beneficiaries will be the
customers.
III. FINDINGS AND CONCLUSION
• Increase in annual disposable income per
household by two and half time by 2015.
It is expected to grow at a CAGR of 5.1%
during 2005-2025.
• Rise in the sales of PCs, tablets and
smartphones as prices have declined.
• Discretionary spending expected to rise
to 61% in 2015 from 52% in 2005.
• Continuous reduction in the cost of
internet.
• Increase in the number of payment
options. The number of online
transactions are expected to increase to
38 million by 2015, compared to 11
million in 2011. The number of debit and
credit card holders is expected to increase
substantially to 350.4 million and 73.7
million respectively in 2014.
• Increase in time spent online by an
Indian. Mean time spent by an Indian on
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3. the internet is expected to increase to 21
hours per month in 2015 from 17.4 hours
spent in 2011.
• In Union Budget 2014 it was brought up
that manufacturing units will be
permitted to trade their merchandise
through retail, including e-commerce
platforms without any additional
approval. This paves path for the foreign
direct investment (FDI) in the
manufacturing sector.
• E-commerce is slowly making way to
Mobile commerce (m-Commerce) as
more and more users are accessing the
net and shopping online through smaller
devices like smartphones, tablets and
notebooks.
These are all factors which shows that e-
commerce has a wider scope in India.
E-commerce in India is a sunrise sector
and companies that would desire to
harvest the benefits of this growing
industry would need to leap into the
bandwagon shortly. The speedy
development of this sector is propelled by
dynamic demographics, growing income
levels and changing life styles, increasing
internet penetration and banking and
other payment alternatives like e-wallets
and so on. But challenges in the form of
under-developed IT infrastructure,
smaller number of credit card users,
logistics issues and lack of governmental
incentives plague this sector to certain
extent. Despite the challenges, the e-
commerce industry in India offers great
scope due to the immense potential
market size and increasing discretionary
spend on the masses.
EXIBIT 1
EXIBIT 2
IV. REFERENCES
[1] Ruth A. Wienclaw, PhD, E-Commerce,
http://search.ebscohost.com/.
[2] E-COMMERCE INDUSTRY IN INDIA,
http://www.academia.edu
[3] E-COMMRCE IN INDIA, Wikipedia
[4] Business Line
Author profile
Nivin Vinoi is currently pursuing his Post
Graduate Diploma in Management from Rajagiri
Business School, Cochin.
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